The Senate Finance Committee has released a draft version of its reconciliation legislative package—an early but important signal of what could be included in a final agreement between the House and Senate. While the bill remains subject to negotiation and change, several provisions within the current draft could have notable implications for senior living operators and the communities they serve.
As the national voice for professionally managed senior living, Argentum is actively tracking the bill’s evolution and continuing to advocate for policy decisions that protect and strengthen the senior living industry. Below, we provide a summary of key provisions that may be relevant to providers, caregivers, and the residents in their care.
Access the full Senate Finance Committee bill text here.
Protecting Medicaid Assisted Living Programs
The Senate’s draft maintains a critical safeguard: no direct cuts to Medicaid waiver programs that support assisted living communities. This mirrors the position held in the House’s version and represents an encouraging sign for providers who rely on these essential funding streams. While direct cuts have been avoided, Argentum remains watchful for any language that could result in indirect funding impacts or future cost shifts.
A New Deduction for Seniors – Sec. 70103
A centerpiece of the draft bill is a temporary, targeted tax deduction aimed at easing the financial burden on older Americans. Seniors aged 65 and older may claim a $6,000 deduction (double for joint filers) starting in tax year 2025, with the benefit phasing out at incomes above $75,000 ($150,000 for joint returns). The provision, which runs through 2028, could offer modest relief to many residents and families budgeting for long-term care and senior housing.
Boosting Affordable Housing Development – Sec. 70422
The bill proposes a permanent 12% increase in Low-Income Housing Tax Credit (LIHTC) allocations to the states—a long-advocated move that could spur the development of new affordable senior living communities. The measure also reduces the bond-financing threshold from 50% to 25%, beginning in 2026, making it easier for more projects to qualify for tax credits. These changes may unlock new pathways for providers interested in expanding middle-market and low-income senior housing options.
Supporting the Workforce: Overtime Deduction – Sec. 70202
A timely and workforce-focused provision introduces a deduction of up to $12,500 ($25,000 joint) for qualified overtime earnings. This may provide real financial relief to caregivers and staff who frequently work extra shifts, particularly during ongoing staffing shortages. The deduction phases out at higher income levels, targeting support to lower- and middle-income earners—many of whom form the backbone of senior care teams.
Reforming Litigation Finance – Sec. 70605
The draft also includes a first-of-its-kind federal tax framework targeting third-party litigation financing. Investors funding lawsuits in exchange for financial returns would face taxation at the top individual income rate plus 3.8%. Additionally, these proceeds would be excluded from capital asset treatment and gross income reporting. The measure adds a 50% withholding requirement, subject to limited exceptions, in an effort to create transparency and uniformity in an increasingly common financial practice.
Carried Interest Omission May Spark Debate
While the House included reforms to the carried interest deduction, the Senate draft leaves this provision out entirely. Expect continued debate as the two chambers work toward compromise. Carried interest reform could carry broader tax implications for private equity investment in senior housing and real estate sectors.
Beyond Assisted Living: Broader Provisions to Watch
While not directly applicable to assisted living, two additional provisions may influence the long-term care landscape:
- Provider Taxes – Sec. 71120: This provision would limit state flexibility in adjusting provider taxes and using directed payments—tools often used to fund Medicaid services.
- Staffing Rule for Nursing Homes – Sec. 71113: The bill would prohibit HHS from implementing or enforcing the Biden administration’s federal staffing rule for skilled nursing facilities. Although assisted living is not covered, this could set regulatory precedents or expectations in the broader long-term care space.
Looking Ahead
Argentum remains deeply engaged in the reconciliation process and continues to work with Congressional leaders to ensure that the needs of assisted living communities are both understood and prioritized.
Members are encouraged to stay informed, engage with the policy team, and raise questions or concerns about how proposed legislative changes may affect their operations.
